Stock futures rebound in choppy trading

Small-business sentiment data shows February slump

NEW YORK (MarketWatch) — U.S. stock futures rebounded on Tuesday, as strategists predicted a range-bound day of trading for Wall Street with global markets unable to find any real direction and the economic data calendar light.

In choppy trade, not dissimilar to the prior session, futures for the S&P 500 index
US:SPH4
added 1.8 points to 1,879.20, and the Dow Jones Industrial Average
US:DJH4
added 19 points to 16,432. Futures for the Nasdaq-100 index
US:NDH4
rose 7.5 points to 3,715.

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Small-business sentiment data was released Tuesday. The data slumped in February on concerns over sales, the economy and employment driving the downturn. The National Federation of Independent Business said its small-business index dropped 2.7 points to 91.4, below expectations.

Job openings and wholesale inventories for January are each due at 10 a.m. Eastern Time.

Ian Shepherdson, chief economist at Pantheon Macroeconomics wrote that the small-business report was “bad, but the weather and the January drop in stock prices explain the hit; expect a March rebound.”

Peter Cardillo, chief market economist at Rockwell Global Capital, expects range-bound trading today. “With the markets being this high and so many people now beginning to raise red flags, I think we’re just going to tread water here around these levels,” Cardillo said. Though he added that doesn’t mean markets can’t make a new high. Psychological resistance is sitting at 1,880, and after that the next level is 1,900, he said.

“I still think we have a bit higher to go before we see any correction, and this is the time of the year when you have that influx of pension money entering the market, so that should be somewhat supportive,” he added.

Wall Street stocks recovered most of their losses on Monday, but still finished on a down note as worries over a hefty plunge in Chinese exports rattled investors. The S&P 500
SPX, -0.23%
retreated from its record closing level and ended the day less than a point lower at 1,877.18.

Asia stocks didn’t knock it out of the park, but did manage flat-to-positive closes after Monday’s mauling, with the China Shanghai Composite Index
SHCOMP, -1.13%
closing up 0.1%. European stocks
SXXP, +0.03%
wavered as banks fell. Copper prices
US:HGK4
hit particularly hard by that downbeat Chinese export data on Monday, managed a gain of 1 cent.

But strategists were still talking about China. Jim Reid and Anthony Ip, strategists at Deutsche Bank, noted that in the five-year period since that March 9, 2009 low, the S&P 500 is up more than 2.7 times in price terms, while the Shanghai Composite is slightly down. The Shanghai Composite is currently at its lowest level since January 2009 and at a level first breached in summer 2000.

“The Chinese economy has grown 68% and 470% in nominal terms since these two dates. So it does seem that the market is telling us something quite different from the bottoms-up perspective to what the top down has been telling us,” said Reid. “Surely such a divergence can’t go on forever.”

Reuters

Russia's President Vladimir Putin (L) meets with Foreign Minister Sergei Lavrov at the Bocharov Ruchei state residence in Sochi, March 10, 2014.

Ukraine could worm its way back into the headlines as diplomatic efforts continued to go in circles. Russian President Vladimir Putin rejected a U.S. proposal to resolve the Ukraine crisis. As a result, U.S. Secretary of State John Kerry put off an invitation to meet Putin in Russia, something that was supposed to happen as early as this week.

Russian stocks returned from a holiday on Monday to losses, with the blue-chip MICEX index
XX:MICEXINDEXCF
stumbling 2% and the ruble
USDRUB, +0.0000%
slightly lower against the dollar.

Oil prices managed to perk up after Monday’s rout, while gold prices were also higher.

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